Volume #16 | IssueNo. 301/2024 | June 2024
Medley of takeaways!
Life lessons can be from as diverse facets as Graduation Day Ceremonies and College Speeches to Cricket to Yoga. As Samhita embarks on its 301st journey, we peek into all these 3 events, for you to reflect upon and enrich your lives.
To begin with is a perspective that struck a chord with me from the address of Mr. Mohit Nirula, COO of the Oberoi & Trident Hotels at my son’s Graduation Ceremony at the Oberoi Centre of Learning & Development, a couple of weeks ago (edited summary) “……..Product, People, Process are our 3 Gods with focus on Profit. We install the People God as our primary God. As the Oberoi brand turns 90 this year, we are entrusting 59 graduates with the responsibility of nurturing one (team members) to delight the other (customers). No hospitality company in the country puts as much emphasis on the care, learning, development of its people as do we. No hospitality company in the country puts as much focus in serving our guests everyday as we do. These 2 deliverables – L & D and upkeep of the teams they need is now in their hands as also the Delightful satisfaction of the guests they serve. While I do threaten them with a miserable existence, I promise you I say that in jest. The idea is for them to be the best they can be and everything we can do to help them be that is our responsibility.”
The other one, not in jest but in all seriousness is what Nvidia CEO, Mr. Jensen Huang said in the widely viewed video of his famous Stanford Speech (https://youtu.be/vOvQSqY7Jgc). “People with high expectations have low resilience. Resilience comes with pain. Pain and suffering build character. I don’t know how to teach it to you except to hope that suffering happens to you !” Like the detergent ad “Daagh acche hain (stains are good)”, it is strange but true – misery, pain, suffering makes a man (and a woman) who he is or wishes to be.
Yes, yes I know. Most of you are still anchored in the historic T20 World Cricket Cup victory of India last week, that ended with an incredible display of deep emotions by the players as well as the game’s supporters. Together with the humungous efforts for the ‘until-then-elusive’ win, it is this vulnerable side of the cricketers that endeared them to one and all. Needless to say, the last couple of days has been raining leadership lessons and management theories from all over the world – a few original ones and rest all forwards. It is best I refrain from adding to these sport learnings for now.
Well, it doesn’t stop me from sharing certain insights from another field of practice which is Yoga. One that strikes a chord is the first Sutra from Pathanjali Yoga – ‘Atha Yoganusasanam’ (NOW yoga is explained OR Yoga is NOW). This also reflects discipline that is the core of any practice, including Cricket. Most of the cricketers when asked what were their thoughts during the match, promptly responded that they did not think of the outcome but played in the PRESENT, focussing on the bowling / runs at hand and nothing else. To be in the present, live for the moment without worrying too much about the future needs discipline, consistency of practice and clarity of mind – all of which Yoga provides. Other takeaways from Yoga are – Flexibility. Adaptability. Letting go. Release. Moving on. Watching your thoughts. Practice of Gratitude. Exercising Discretion. Alignment of Body, Mind and Soul. Keep experiencing and adding…..
Yoga is a must if one has to navigate the regulatory landscape of our country. This is not in jest, it is in all seriousness, what with the flurry of regulatory changes constantly being thrust on us from various governmental agencies, either to usher in new ones, replace, modify or rectify existing provisions !!. This 301st issue contains majorly from GST and 2 important Consultation Paper highlights from SEBI. July will be a super busy month with the expected Union Budget to be presented along with a host of other updates.
For any previous issues of Samhita and the readers’ feedback, please visit sharadasc.com
Happy Reading
S.C. Sharada
www.linkedin.com
Regulatory Updates
SEBI Updates
Pursuant to mandates in the Union Budget for FY 2023-24, an Expert Committee was formed under SEBI for reviewing the ICDR and LODR Regulations to facilitate ease of doing business. The Committee has released its report and consultation paper on June 26, 2024 with its recommendations. Apart from the specific recommendations under ICDR and LODR, certain recommendations are aimed at aligning the definitions contained in these regulations viz. associate, financial year, securities law and SR equity shares. It may be noted that SEBI has invited the public to share its comments on the recommendations by July 17, 2024. Some of the major recommendations proposed by the Expert Committee are as follows:
1. Recommendations under ICDR
- Combining pre-issue advertisement and price band advertisement as single advertisement
- Permitting issuers to voluntarily disclose financial statements of the subsidiaries/businesses acquired or divested. There were no enabling provisions for such disclosure earlier.
- Requirement to issue advertisement disclosing the fact of filing of draft offer document with the Board within two working days instead of two days
- Permitting Issuers to obtain the certificate for utilization of the loan from a peer reviewed chartered accountant instead of statutory auditor, where one of the objects of the issue is loan repayment.
2. Recommendations under LODR
- Enabling a single filing system through API based integration between stock exchanges for filings and disclosures
- Streamlining the requirements of Newspaper Advertisements. Recommendation to make it optional. Instead publishing of QR code in the newspaper which will direct to the webpage where full financial statements can be accessed is being recommended
- Excluding the time taken for regulatory, statutory or government approvals in case of timeline specified for obtaining shareholder approval for appointment or reappointment of director
- Permitting ratification of RPTs by Audit Committee subject to certain conditions
- Additional time for disclosure of outcome of those Board meetings which conclude after trading hours
- Relaxation from approval requirements specified in regulation 24(6) for transactions between two wholly owned subsidiaries of the listed entity.
- Mandating Compliance Officer to be designated as key managerial personnel and to be a whole-time employee not beyond one level below the board of directors.
Foreign Portfolio Investors (“FPI”) are offshore funds which deal in securities in India based on the certificate granted to them by the designated depository participant under SEBI. FPIs are regulated by SEBI through the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 (“SEBI FPI Regulations”). As per Regulation 7(5) of the said regulations, the FPIs should have a valid registration certificate as long as they hold securities or derivates in India.
Regulation 7 of the SEBI FPI Regulations has been amended vide Notification dated June 03, 2024 to provide certain flexibility in case of expiry of registration. The highlights of the amendments which are effective immediately are enclosed.
Open Highlights- SEBI FPI Regulations Amendments
Open SEBI notification dated June 03, 2024
SEBI had issued a directive to Investment Bankers handling IPOs to ensure that special rights given to shareholders of IPO bound companies should lapse at the time of filing Updated Draft Red Herring Prospectus (UDRHP). On June 24, 2024, SEBI has recalled this directive by clarifying that such rights need to lapse only at the time of listing. This will protect the rights of investors where there is no certainty of the company getting listed. Apparently, this communication has been sent to Association of Investment Bankers of India (AIBI).
SEBI vide notification dated June 25, 2024 has notified amendments to Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015(PIT Regulations). These amendments pertain to Regulation 5 of the PIT Regulations relating to Trading Plan. Various requirements relating to the Trading Plan have been relaxed. The major amendments notified are as follows:
- Trading Plans submitted by an ‘Insider’ to the Compliance Officer for approval and public disclosure shall not entail commencement of trading earlier than 120 calendar days from such public disclosure. The 6 months cooling period specified earlier has been replaced with 120 calendar days.
- Omission of the restriction on the Trading Plan, to not entail trading for the period between the 20th trading day prior to the last day of any financial period for which results are required to be announced by the issuer of the securities and the 2nd trading day after the disclosure of such financial results.
- Omission of the restriction for the Trading Plan to entail trading plan of not less than 12 months.
- Permanent incapacity or bankruptcy or operation of law added as grounds for permitting deviation from an approved Trading Plan.
- Timeline of two working days specified for approval or rejection of Trading Plan by the Compliance Officer. Further the Compliance Officer shall submit it to the stock exchanges on the day of approval. Earlier the timeline for approval/rejection of Trading Plan was not specified.
RBI Update
As per the RBI’s Master Directions on Overseas Investment, 2022, any investment in units of any overseas investment fund, duly regulated by financial regulator of the host country shall be considered as Overseas Portfolio Investment (OPI). Accordingly, investments in only units and not any other kinds of instruments were allowed. Further only such funds which were regulated by financial regulator in the host country were recognised for this purpose.
RBI vide Notification dated June 07, 2024 has amended this provision to:
- permit investments in any other instrument apart from units, issued by such overseas investment fund
- widened the net of investment fund overseas to include those funds whose activities are regulated by financial sector regulator of host country or jurisdiction through a fund manager.
It may be noted that only listed companies and resident individuals can make OPI in jurisdictions other than IFSCs. Whereas in IFSCs, unlisted companies are also permitted to undertake OPI.
IBBI Update
The Insolvency and Bankruptcy Board of India (IBBI) has released the Insolvency Professionals to Act as Interim Resolution Professionals, Liquidators, Resolution Professionals, and Bankruptcy Trustees (Recommendation) Guidelines, 2024 on June 05, 2024. The same is in supersession of Guidelines released by the IBBI on December 08, 2023. However, it may be noted that all actions taken under the repealed guidelines are saved.
These guidelines specify eligibility criteria, conditions, forms to be submitted to the IBBI and more for efficient empanelment of the Insolvency Professionals with Adjudicating Authority for their appointment as Interim Resolution Professionals, Resolution Professionals, Liquidators, and Bankruptcy Trustees in the insolvency proceedings for corporate and individual debtors. The highlights of the Guidelines as enclosed.
Open Highlights of IBBI Guidelines
Open IBBI Guidelines dated June 05, 2024
GST Updates
GST council concluded its 53rd council meeting in Delhi on June 22, 2024. The Council has taken various decisions to ease the compliance burden and grievances of small and medium taxpayers. Following circulars were issued to implement the decisions:
- Circular no 207- Fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts and Supreme Court
- Circular no 208 – Clarifications on various issues pertaining to special procedure for the manufacturers of the specified commodities
- Circular no 209 – Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply
- Circular no 210 – Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit.
- Circular no 211 – Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons.
- Circular no 212 – Clarification on mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers
- Circular no 213- Seeking clarity on taxability of GST on ESOP/ESPP/RSU provided through overseas holding company
- Circular no 214- Clarification on the requirement of reversal of input tax credit in respect of the portion of the premium for life insurance policies which is not included in taxable value
- Circular no 215 – Clarification on taxability of wreck and salvage values in motor insurance claims.
- Circular no 216 – Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated 17.07.2023
- Circular no 217- Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement.
- Circular no 218 – Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person.
- Circular no 219- Clarification on availability of input tax credit on ducts and manholes used in network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017
- Circular no 220- Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors
- Circular no 221- Time of supply on Annuity Payments under HAM Projects
- Circular no 222- Time of supply in respect of supply of allotment of Spectrum to Telecom companies
Others
Industrial Standing Orders Act exemption- Extended for 5 years
The Industrial Employment (Standing Orders) Act, 1946 among others, requires companies having 50 or more employees / workmen to follow a specific procedure involving approval of the Labour Commissioner before publishing any Standing Order.
Vide notification dated May 25, 2019 (“Original Notification“), the Government of Karnataka (GoK) had granted exemption to IT / ITES / Startups / Animation / Gaming / Computer Graphics / Telecom / BPO / KPO / other knowledge based industrial establishments (“Exempted Companies”) from the applicability of the Industrial Employment (Standing Orders) Act, 1946 for a period of 5 years which lapsed on May 25, 2024.
The said exemption has been extended for a further period of 5 years by the GoK vide notification dated June 10, 2024 subject to compliance of certain conditions which have been retained as is from the Original Notification. Conditions include constitution of ICC under POSH, Grievance Redressal Committee, intimation of disciplinary action to the Labour Commissioner etc.
Statutory Compliance Calendar
July 2024
Quote of the day
"Almost everything will work again, if you unplug it for a few minutes, including you."
- Anne Lamott
Disclaimer: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.